SRINAGAR, India (AFP) - Hundreds of protesters clashed with police in Indian Kashmir on Wednesday after government forces killed a suspected rebel in a gun battle, police said.

Three soldiers were also wounded in the battle, which began on Tuesday when government forces cordoned off the village of Heff, around 50km from the main city of Srinagar, where they suspected rebels were hiding out.

News of the man's death brought hundreds of protesters onto the streets where they hurled rocks at police, who fired tear gas and live bullets into the air to disperse them.

"At least 15 people were injured in the clashes, including nine policemen and a district administrator," a police officer said on condition of anonymity as he was not authorised to speak to media.

Another police officer said the dead man was a member of Hizbul Mujahideen, one of several rebel groups seeking independence for Indian-administered Kashmir or a merger with Pakistan.

Kashmir has been divided between India and Pakistan since the two countries won independence from Britain in 1947. Both claim the scenic Himalayan territory in full.

Violence has steadily declined after the arch rivals signed a border ceasefire agreement in 2003, but armed encounters between rebels and government forces occur regularly.

The fighting has left tens of thousands dead, mostly civilians.

The latest clashes came a day after the regional Peoples Democratic Party agreed to form a coalition government with ruling Hindu nationalist Bharatiya Janata Party following state elections last year.